India's emergence as an economic, political and military power has left the Chinese army worried, even as the two countries in the recent years have increased their economic and military cooperation, states a report released by the Pentagon [Images].

"The People's Liberation Army remains concerned with persistent disputes along China's shared border with India and the strategic ramifications of India's rising economic, political, and military power," the Pentagon said in its Congressional mandated annual report on China's army.

The 78-page report devotes a small sub-section on India-China relations, along with those on Russia [Images] and Central Asian republics. "China has deepened its ties with India through increased trade, high-level dialogues, and an improved military-to-military relationship," the report said.

The two countries have agreed to boost their bilateral trade from $11.4 billion in 2007 to $40 billion in 2010. India and China have also held several rounds of dialogues over disputed territorial claims.

Sino-Indian defence ties were institutionalised in 2007 with the establishment of an Annual Defence Dialogue and by conducting three bilateral defence exercises since 2007, but the PLA remains worried about the rise of India as a regional and global power and its increasing military might, the report said.